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Author Topic: BTC vs Geenback  (Read 438 times)
Finetuned
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November 22, 2011, 06:14:29 AM
 #1

The US dollar is the standard for the world currency market. Value of every currency worldwide is based off the Dollar.

In theory, the dollar started off as a free market driven by supply and demand. Practical usage of the dollar is now far from a free market as the ability to borrow against "asset", foreign manipulation of currency in regards to import/export, and the US Mint (Federal Reserve Board) having no governance by any other department. In short, what was once something of value is just in the end a piece of paper with nothing to back it up.

How will Bitcoin be different assuming it will one day be accepted as the form of currency for online transactions. By what standard is a Bitcoin valued and what system is in place to ensure that value is justifiable.
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realnowhereman
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November 22, 2011, 01:12:17 PM
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How will Bitcoin be different assuming it will one day be accepted as the form of currency for online transactions. By what standard is a Bitcoin valued and what system is in place to ensure that value is justifiable.

The power of the crowd is what protects Bitcoin from the manipulation you describe.

The "rules" that govern bitcoin are determined, effectively, by the choice of software run by the bitcoin miners.  To change those rules you have to persuade >50% of the hashing power owners to move to a client that implements a different set of rules.

Given that people that have already chosen to run bitcoin miners must have decided they find the current rules acceptable; then you have to persuade them that not only is your alternative workable, but that it's better than what they have.  Given further that they probably own bitcoins already, you'd really have to work hard to persuade them to change the rules in such a way that their currently held bitcoins would be devalued.

As to "ensuring that value is justifiable"... what standard ensures the value of a banana?  None.  The price of a bitcoin is not guaranteed to be anything other that what you can sell one for.  Just like everything else on the planet.

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